Sample Solution from
EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Chapter 1
Problem 1RQ
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To determine

To describe: The scarcity of goods and scarcity of resources and its relationship with the pricing.

Expert Solution

Answer

Inadequacies of goods and services generally decide the pricing and when the there is shortage or scarcity, the price is higher. Resources cannot be measured until it is demanded.

Explanation of Solution

Generally, small quantities or inadequate quantities are called scarcity of the goods and when the goods and services are valued at the situation of scarcity, and then the price is normally a bit higher than the normal prices. Valuation of resources cannot be done until there is a demand of resources. Till the demand is there, the resources have zero value. At the times, when Oil was discovered, it was having no value but as soon as the resources getting reduced the price become high and high. Hence, it can be said that the resource cannot be said scarce until the demand is there and there is value of it.

Concept Introduction

Introduction: Scarcity of goods and services and its impact over the pricing and the scarcity of resources and its relationship with the price. Resources are valued when there is a demand of it. Until Resources are valued and demanded the scarcity of resources cannot be ascertained.

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